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Yogurt's 'Hot' And Growing In New York

When New York Governor Cuomo calls, local officials listen up. That's what happened last week. And within hours, the cowed mayors of Gloversville and Johnstown, N.Y., announced that they had quit foot-dragging on an agreement to allow Fage USA to proceed with its plans to double the 85,000 tons of Greek-style yogurt processing in the Mohawk Valley.

Yogurt consumption is the dairy industry's "hottest" growth product. Between 1990 and 2009, U.S. production rose more than 290%, according to USDA bead counters – dwarfing growth in other dairy product sectors. And Greek-style yogurt is the latest consumer rage.

There's room for growth in the Northeast. Most yogurt is produced in West Coast and Midwest processing plants.

The proposed $100 million expansion was warmly greeted by New York Farm Bureau President Dean Norton. "This expansion will create 150 new good paying jobs in the local area," he says. "It'll also serve as a vehicle for New York's dairy farmers to expand and reinvest in their business.

"Since it can take up to three gallons of milk to make a gallon of yogurt, the benefits for upstate dairy farmers and their families are obvious," adds Norton. Fage's expansion, taken in combination with the Chobani yogurt processing plant in Chenango County and the announcement of two more yogurt processing facilities in Genesee County, promises significant benefits to dairy farmers.

What's driving the market

Yogurt production in 2010 was 4.2 billion pounds at 116 U.S. processing plants. In 1980, only 570 million pounds was produced in this country.

Yogurt is touted as a healthy or functional food due to probiotics. According to Dairy Management Inc., probiotics "are key ingredients in any product promoting digestive health." About 80% of U.S. manufactured yogurt contains Lactobacillus acidophilus, a bacterial strain that breaks down lactose. The probiotics market in the United States is estimated at being almost $1.5 billion in 2010.

Yogurt is being incorporated into other products, too. General Mills', Kellogg's and Quaker Oats sell cereals containing yogurt. McDonald's and Wendy's offer yogurt-based products on their menu.

Purina even has introduced dog and cat foods containing yogurt. Yogurt has also been added to toothpaste, mouthwash, facial masks and suntan products.